Farm Bill on stage: Brazil is waiting in the wings.July 26th, 2012 | by Gawain Kripke
In Congress, a game of bluff and bluster is playing out around the Farm Bill. The issue is whether the leaders of the House Agriculture Committee can cajole or coerce the House Republican leaders to bring the Farm Bill to the floor of the House for approval. Time is running out before Congress goes on vacation, and as the calendar gets short, the chance of passing a new Farm Bill into law gets smaller and smaller.
The Senate, having passed a version of the new Farm Bill, is waiting. The House Agriculture Committee passed a Farm Bill out, but it is stuck in limbo before it reaches the full House of Representatives. The Committee Chair, Frank Lucas of Oklahoma, and the senior Democrat, Collin Peterson of Minnesota are pleading and pushing to get time on the calendar. But House Speaker John Boehner of Ohio has been coy. And the clock is ticking.
Speaker Boehner once sat on the House Agriculture Committee, but he’s no aggie. In the past, he’s taken on agriculture interests in the name of free-market principles and small-government budget thrift. He recently said, “we have a Soviet-style dairy program in America today” and has a record of voting against Farm Bills in the past.
There’s a real question as to whether the Farm Bill has the votes to pass. The bill is unpopular among liberals, mainly because it cuts US food assistance programs for poor people. But the bill causes heartburn for many conservatives because it’s anything but a “free market” solution. A conservative think-tank says about the Farm Bill, “the conservative movement has united against these trillion dollar takeover bills that seek to expand the federal government’s role into nearly every sector of American life.”
With opposition across the spectrum, it may be hard to forge the 218 votes needed to get the Farm Bill over the line in the House. Even then, it will have to be negotiated and merged with the Senate version and then re-voted by the House and Senate. All before January, and with very few working days on the Congressional calendar.
A quiet presence on the Farm Bill has been Brazil. For years, Brazil has been waiting for Congress to pass a new Farm Bill, with the expectation that the new legislation will bring the US into compliance with WTO agreements. Brazil won a legal challenge against US cotton subsidies and has the right to retaliate against the US. The US pays Brazil for their patience to the tune of $147m annually, which is a lot of money, but still less than the $800m+ Brazil is entitled to inflict on the US under the WTO rules.
Seeing that Congress likely won’t pass a Farm Bill this year, US trade and agriculture officials flew down to Brazil last week to make sure Brazil doesn’t rush into trade retaliation. They agreed to extend the current agreement for a few more months or until a new Farm Bill is passed.
But Brazil is sharpening its sword. Because even when a new Farm Bill is finalized, there’s little chance that it will satisfy them and remove unfair subsidies for US cotton production. In June, Brazil reactivated a technical group to decide which US export products would be taxed if they retaliate and products for which US intellectual property rights would be waived. It would be interesting to be a fly on the wall to listen in to the discussion of that group.